Japanese Shares End Lower as Middle East Conflict Spurs Risk Aversion

Reuters

17:08 JST, March 13, 2026

TOKYO, March 13 (Reuters) – Japan’s Nikkei closed lower on Friday and posted a second consecutive weekly decline of 3.2%, as escalating tensions in the Middle East fueled inflation concerns and prompted investors to dump riskier assets.

The Nikkei dropped 1.2% to close at 53,819.61 on Friday, after sliding as much as 2.1% earlier in the session.

The index has lost 8.5% since its February 27 close, before the U.S.-Israeli war with Iran erupted. The broader Topix eased 0.6% to 3,629.03.

“Although crude oil prices have retreated slightly from their recent peak, they remain well above levels seen before the conflict began,” Shutarou Yasuda, market analyst at Tokai Tokyo Intelligence Laboratory, said in a report. “Risks of turbulence in equity markets are likely to persist next week, depending on the news flow.”

Brent futures for May edged 0.04% lower to $100.42 a barrel by 0615 GMT. U.S. West Texas Intermediate (WTI) crude for April CLc1 was down 0.6% at $95.12 a barrel.

The conflict has dampened sentiment in Japan markets, which had been driven by strong corporate earnings and expectations of expansionary fiscal policy after Prime Minister Sanae Takaichi won a snap election.

In the Nikkei index, there were 72 advancers and 152 laggards.

Technology shares dragged on the benchmark, with SoftBank Group slipping 4.5% and chip-testing equipment maker Advantest down 3.5%.

Honda Motor dropped 5.6%, its steepest percentage drop since February 2025, after Japan’s second-largest automaker said it would post its first annual loss in almost 70 years as a listed company over up to $15.7 billion in restructuring costs tied to its electric-vehicle business.

Bucking the broader trend, energy-related shares rose, with the Tokyo bourse’s energy explorers index, the best percentage gainer among its 33 sub-indexes, up 2.1%. Shares of Inpex, Japan’s largest oil and gas explorer, added 2%.